With state and federal governments strapped for cash, a new way to finance clean energy and storm resiliency projects is moving through the Legislature.
The legislation (S-1611) is actually not so novel. Modeled on programs already operating successfully in more than 30 states, the bill has been kicked around by New Jersey lawmakers for about a decade without ever becoming law.
The bill aims to fund renewable energy projects, energy efficiency upgrades, and energy storage projects as well as storm shelters and hurricane-resistant and flood-resistant initiatives.
The so-called PACE (property assessed clean energy) system is designed to access financing for such projects without any upfront cost, a hurdle that often prevents such initiatives from ever getting started.
Under the bill, released unanimously by the Senate Environment and Energy Committee yesterday, participating municipalities would arrange financing through lenders who would be repaid by a special assessment on the improved building. The program is voluntary.
“New Jersey needs to start upgrading its buildings to become greener and more efficient. We also need to upgrade our infrastructure in order to withstand powerful storms like Superstorm Sandy,’’ said Sen. Bob Smith, the chairman of the committee and sponsor of the bill.
Initially, the program will be available only to commercial, industrial and nonprofit entities such as hospitals, schools or religious institutions. If the program gets off to a successful start, the Legislature can begin thinking about expanding its scope to include residential properties, according to Smith. The bill would allow the financing of projects at multiple-dwelling units of five or more.
“We’ve been clamoring about PACE for the past six years,’’ said Jonathan Cloud, executive director of NJ PACE. “This bill is sufficient to launch the program in New Jersey.’’
The program dovetails with some of the priorities of Gov. Phil Murphy, who is expected to sign a legislative package tomorrow that would ramp up the state’s reliance on renewable energy and accelerate efforts to reduce energy use in New Jersey. Part of the package includes a controversial measure that would have utility customers subsidize nuclear power.
“Through PACE, municipalities will be able to provide initial financing for improving the sustainability and efficiency of buildings and properties,’’ Smith said.
The legislation now heads to the Senate Budget and Appropriations Committee for further consideration. It mirrors a number of environmental and energy bills that have been revived under the new administration. (A similar version of the bill had been conditionally vetoed by former Gov. Chris Christie in his second term.)